GMAC survey reveals low consumer knowledge about credit ratingsMortgagePress.comCredit rating information According to the recent GMAC Mortgage Second Quarter Consumer Survey, U.S. consumers lack important knowledge about credit scores. The survey revealed that the majority of consumers do not fully understand the importance of a credit score, how that score is determined and, most importantly, the steps they can take to improve credit scores. The survey polled more than 1,000 consumers nationwide on the impact of credit on the entire home financing process. Key findings include the following: †Sixty-two percent of respondents did not know that a score above 620 out of 850 is necessary to secure the most favorable mortgage rate. †More than 50 percent of respondents incorrectly answered that increased income level would raise their credit score. †Only 42 percent knew that payment history was a critical determinant to a credit score. †Sixty-four percent of respondents would check their credit only six months before purchasing a home. "Potential homebuyers should not view credit ratings as the last step in the home financing process," said Paul Fein, senior vice president and Southeast divisional manager for GMAC Mortgage. "Credit scores are essential to the mortgage lending process, and it's important that homebuyers start evaluating their credit scores early in the process, so they can get above the 620 mark before their formal application is processed. We are encouraged to see that 92 percent of consumers polled are taking some action to improve their credit; however consumers must be educated on what actions will and will not affect their ability to secure home financing." As noted by the national credit rating agencies, an individual's credit rating is attained by calculating and evaluating several factors, including payment history during the last two to three years, amount of debt outstanding and available lines of credit, length of credit history, new lines of credit and types of credit used. However, other factors, such as the number of accounts with outstanding balances, proportion of credit used, length of account activity and number of recent credit inquiries also play a significant role. GMAC Mortgage and CARAVAN Opinion Research Corporation conducted a national telephone survey of 1,057 households nationwide between May 13 and May 16. For a sample of 1,000, the margin is plus or minus three percentage points at the 95 percent confidence level. For more information, visit www.gmacmortgage.com.